Chapter 7. Examination
Returns
Control
System
(ERCS)

Section 3. Statute
of
Limitations

4.7.3
Statute
of
Limitations

4.7.3.1
(10-01-2003)
Introduction

This
section
contains
information
regarding
the
establishment
of
and
requirement
for
control
of
the
statute
of
limitations
date
for
returns
controlled
on
ERCS.

IRM
Handbook
25.6,
Statute
of
Limitations
Handbook,
provides
additional
information
regarding
control
of
the
statute
of
limitations
on
AIMS
and
responsibilities
for
controlling
the
statute
of
limitations
date.

4.7.3.2
(07-31-2000)
Security

Access
to
ERCS
for
the
purpose
of
updating
the
statute
of
limitations
is
limited
to
those
with
WRITE
permission.
This
is
generally
the
secretary
or
other
clerical
personnel.

An
individual
with
APPROVAL
authority
must
approve
the
updating
of
the
statute
of
limitations
on
ERCS.
This
is
generally
the
group
manager,
support
manager,
or
the
next
higher
level
manager.

4.7.3.3
(07-31-2000)
Approval
Authority

The
purpose
of
APPROVAL
authority
for
updating
the
statute
of
limitations
is
to
ensure
control
over
the
proper
use
of
statutes
on
cases
established
on
ERCS.
Updating
and
controlling
the
statute
on
ERCS
is
important
to
ensure
that
there
is
no
loss
to
the
taxpayer
or
the
government
from
erroneous
abatements
or
barred
assessments.
Because
ERCS
provides
reports
to
assist
in
the
control
of
the
statute
of
limitations
date,
it
is
imperative
that
the
correct
statute
date
is
recorded
on
the
system.

Any
time
a
statute
is
changed,
or
updated
on
ERCS,
approval
is
required
by
the
next
level
of
management.

Statute
of
limitation
dates
are
created
when
the
tax
return
is
filed
with
a
campus.
This
date
is
created
on
the
Master
File
and
is
the
date
created
on
ERCS
from
AIMS.
Generally,
there
are
three
reasons
a
statute
would
be
updated
on
the
ERCS
system:

Irregular
assessment
period

Updating
to
an
alpha
statute
date

Updating
the
statute
of
limitations
after
securing
Form
872,
Consent
to
Extend
the
Time
to
Assess
Tax

The
approval
and
update
of
the
statute
of
limitations
on
ERCS
should
be
done
immediately
after
the
event
occurs
necessitating
a
statute
update.
This
is
covered
in
more
depth
in
this
chapter
under
section
3.4
below.

Instructions
on
how
to
update
statutes
of
limitation
on
ERCS
can
be
found
in
the
ERCS
user
handbooks.

4.7.3.4
(10-01-2003)
Roles
and
Responsibilities

Any
individual
handling
a
return
has
the
responsibility
to
ensure
the
statute
of
limitations
date
for
that
return
is
correctly
reflected
in
the
case
file
and
on
ERCS.

When
an
individual
in
a
group,
or
other
function,
receives
a
case
from
a
campus,
or
other
function,
he/she
is
required
to
ensure
the
statute
of
limitations
date
is
properly
reflected
in
the
case
file
and
on
ERCS.

If
the
statute
of
limitations
date
is
improper,
the
receiving
function
should
immediately
prepare
Form
5348,
Examination
Update,
for
the
manager's
written
approval.
After
approval
by
the
manager,
the
secretary
will
update
the
statute
date
on
ERCS,
and
give
both
the
form
5348
and
the
return
to
the
manager
for
approval
on
ERCS.
The
first
individual
receiving
the
return
in
the
function
should
do
this.
All
individuals
dealing
with
the
return
in
the
function
should
ensure
that
the
statute
date
is
correct
when
they
receive
the
return.

Form
895,
Notice
of
Statute
Expiration,
either
located
on
the
case
file
or
tax
return,
should
also
be
updated
to
the
new
statute
date;
if
applicable.
General
instructions
on
forms
895
use
can
be
found
in
IRM
25.6,
Statute
of
Limitations
Handbook.

The
ERCS
upload,
done
daily,
will
automatically
update
the
statute
of
limitations
date
on
AIMS.

The
group
secretary
is
responsible
for
ensuring
forms
895
are
provided
for
all
returns
requiring
them.
Therefore,
it
is
the
secretary's
responsibility
to
run
the
appropriate
895
Reports
as
noted
in
the
Section
6,
Reports.

Either
the
group
manager/section
chief
or
secretary
is
responsible
for
running
the
Pending
Statute
Report
for
his/her
group
or
section
on
a
monthly
basis.
Requirements
for
this
are
outlined
below
in
the
Section
6,
Reports.

4.7.3.5
(10-01-2003)
Inventory
Management

In
the
group
or
function,
the
group
manager,
or
support
manager,
and
examiner,
or
person
assigned
control
of
the
return,
is
ultimately
responsible
for
the
control
of
the
statute
of
limitations
and
ensuring
that
the
proper
statute
date
is
on
ERCS.

When
a
return
is
received
from
the
campus
or
other
function,
the
secretary
or
other
receiving
individual
should
review
the
case
and,
if
the
statute
date
is
improper,
the
return
should
be
given
to
the
group
manager
or
support
manager
for
review
and
signature
approval
of
the
statute
update.
After
approval,
the
secretary
will
update
the
statute
on
ERCS.
The
return
and/or
case
file
should
indicate
the
new
statute
date.

When
a
return
is
received
by
the
revenue
agent/tax
compliance
officer
(hereinafter
referred
to
as
technical
employee),
etc.,
he/she
should
ensure
that
the
statute
of
limitations
date
on
ERCS
is
correct.
If
the
date
is
not
correct,
the
technical
employee
will
prepare
form
5348
for
review
and
signature
approval
of
the
statute
update.
After
managerial
approval,
the
secretary
will
update
the
statute
date
on
ERCS
and
provide
the
form
5348
and
the
return
to
the
group
manager
for
approval
on
ERCS.

Collateral
records
maintained
on
ERCS
may
also
require
statute
of
limitations
dates.
When
a
collateral
record
actually
has
a
live
statute
of
limitations
(e.g.,
penalty
cases),
it
is
required
that
this
statute
date
be
controlled
on
ERCS
as
would
normal
records
maintained
on
ERCS.

All
returns
with
statutes
expiring
within
180
days
(120
days
for
returns
in
Case
Processing),
irregular
statute
dates,
or
all
returns
with
alpha
statutes,
require
that
a
form
895
be
placed
on
the
case
file
(see
IRM
25.6,
Statute
of
Limitations).
Areas
have
the
option
of
increasing
the
180-
day
and
120-day
timeframes
to
a
maximum
of
400
days;
however,
they
cannot
shorten
the
timeframes.
ERCS
generates
form
895
based
on
the
statute
of
limitations
date
recorded
on
ERCS.
Forms
895
currently
are
generated
through
ERCS
using
the
computation
based
on
the
statute
date
in
ERCS.
If
a
statute
of
limitations
is
updated
on
ERCS
prior
to
the
statute
of
limitations
falling
within
the
180-day
timeframe,
form
895
will
not
generate
until
the
statute
of
limitations
is
again
within
the
180/120-day
timeframe.
In
cases
such
as
these,
a
manually
prepared
form
895
will
be
required.
Some
areas
may
locally
require
(particularly
in
tax
compliance
office
groups)
all
prior
year
returns,
whose
timely
statute
date
falls
within
the
180
days,
have
form
895
on
the
case
file.
ERCS
will
not
generate
a
form
895
until
the
established
timeframe
has
been
reached.

The
secretary
should
generate
Form
895
from
ERCS
when
the
return
has
180
days
remaining
on
the
statute.
Forms
895
should
also
be
generated
on
all
returns
containing
alpha
statutes.

ERCS
will
automatically
indicate
that
a
Form
895
has
been
issued.
When
Form
895
is
returned,
the
secretary
should
update
ERCS
to
indicate
that
the
895
has
been
received.
Instructions
on
this
process
can
be
found
in
the
ERCS
user
handbooks.

The
secretary
should
reprint
forms
895
as
necessary
if
the
form
895
has
not
been
returned
from
the
individual
responsible
for
the
return
within
a
specified
period
of
time.
The
secretary
can
run
the
Reprint
Specific
895
Forms
or
the
Reprint
ALL
895
Forms
for
this
purpose.

IRM
25.6,
Statute
of
Limitations
Handbook,
contains
additional
information
regarding
the
maintenance
of
forms
895
and
the
requirements
for
completion
and
return
of
the
form.

4.7.3.6
(10-01-2003)
Reports

There
are
two
types
of
ERCS
reports
that
provide
statute
of
limitations
information.

Pending
Statute
Report,
and

895
Reports

See
Section
6,
Reports,
for
detailed
information.

Pending
Statute
Report
—
This
report
is
used
to
monitor
impending
statute
returns
to
ensure
that
statutes
will
not
expire
on
returns
controlled
on
ERCS.

All
groups
and
functions
should
run
the
Pending
Statute
Report
monthly.
This
report
should
be
run
for
all
statutes
expiring
within
180
days
or
more.
This
report
should
be
compared
to
AIMS
Tables
4.0
and
4.1.
Discrepancies
should
be
noted
and
corrected,

The
group
manager
or
support
manager
should
also
ensure
all
returns
shown
on
the
Pending
Statute
Report
have
been
issued
a
form
895,
the
statute
dates
are
proper,
and
actions
are
being
taken
to
ensure
that
the
statute
of
limitations
date
will
not
expire,

The
support
manager
can
also
run
a
Pending
Statute
Report
for
each
AAC
in
his/her
territory.
This
report
would
alert
the
field
territory
manager
to
all
returns
in
his/her
territory
with
impending
statutes,

The
field
territory
manager,
and
PSP
support
manager,
can
run
a
Pending
Statute
Report
for
all
returns
in
the
territory
with
impending
statute
dates,
and

It
should
be
noted
the
Pending
Statute
Report
does
not
list
any
expired
statutes
or
alpha
statutes
for
returns
controlled
on
ERCS.
The
895
Report
can
be
generated
from
ERCS
that
will
list
returns
with
alpha
statute
and/or
expired
statutes.
This
is
at
the
discretion
of
the
individual
area.
Some
alpha
statutes
actually
have
a
date
that
will
expire
sometime
in
the
future
(e.g.
BB,
DD,
HH,
MM).
Therefore,
group
managers
and
support
managers
should
be
aware
the
Pending
Statute
Report
will
not
provide
data
on
all
statutes
which
are
expiring
within
the
time
frame
specified
when
the
report
is
run.
Group
managers
and
support
managers
should
use
the
895
Report
to
identify
alpha
statutes
expiring
within
a
short
period
of
time.

895
Report
—
This
report
is
used
to
monitor
the
issuance
and
receipt
of
forms
895
on
impending
statute
cases,
cases
where
the
statute
is
expired,
and
cases
which
have
alpha
statute
dates.

The
895
Report
should
be
run
monthly.
This
provides
a
listing
of
all
returns
that
should
have
forms
895
and
whether
or
not
a
form
895
has
been
completed
and
returned.

Section
6,
Reports,
contains
detailed
descriptions
as
well
as
recommended
uses
and
frequency
of
generating
reports
available
through
ERCS.

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